Strategies for Internet Middlemen in the Intermediation/Disintermediation/Reintermediation Cycle

Abstract

The emergence of new technologies for electronic commerce on the Internet makes possible different ways of interacting for all the players in a market. This transformation of the traditional market interaction can be understood in terms of an intermediation, disintermediation and reintermediation (IDR) cycle. By looking at a series of minicases of the IDR cycle in various industries, we are able to identify four major competitive strategies firms use in the IDR cycle: partnering for access, technology licensing, partnering for content, and partnering for application development. We then analyze the conditions under which these strategies help a firm to achieve sustainable competitive advantage in its marketplace. Our analysis reveals that each strategy requires a different combination of firm capabilities and environmental conditions. As a result, these middlemen should not rely on technological innovation alone if they want to be successful in the marketplace.